Service 101 - Defining Strategy
Distinguishing Service vs Project based business models & which is right for you.
If you haven’t already, read this first.
Alright guys, time to get the most basic information out of the way as quickly as possible. We’re going to be starting from zero here and there’s a lot of ground to cover. In this introductory series, we’re going to keep things as “to the point” as possible.
Before you actually start your business, you need to figure out which service you’ll be offering and if the businesses model is going to be Project-based, Service-based, or a combination of both.
A brief description of both should give you a rough idea of how you’ll want to approach getting things off the ground. We’ll also be covering what you should consider before creating a plan of action.
Let’s get started.
What Exactly Are “Home Services”?
There are a wide variety of options available to you for providing a service to homeowners. We’re going to break it down into some categories here so you can narrow it down quickly based on your interests and skillsets.
Before we do so, you need to understand there’s a technical difference between a project-based business and a service-based business, even though both are still technically a service you’re offering.
What’s the difference?
Projects are longer, involve more planning, and do not result in recurring revenue.
Examples include:
general contracting
hardscape
roofing
painting
& any other non-recurring service (generally speaking)
Service is quicker, tends to be smaller ticket, and depending on the specific service may be a recurring revenue model.
Examples include:
landscaping
cleaning (all kinds)
pest control
plumbing
electrical
HVAC
IMPORTANT NOTE:
There are some specific trades or services that fall under both categories. For example, a plumber can have both a Project side and a Service side in their business.
Projects would be considered re-plumbs and other such remodel work, while Service would entail repairs and fixture upgrades.
This applies to others like Electrical, HVAC, etc.
What’s important to understand here is that your trade will dictate if you’re primarily project-based or service-based. A hybrid of both can be great but they have to be approached differently.
Service Options To Choose From
It should go without saying there are a wide variety of options to choose. While my experience is primarily in renovation & repair (trades) the same basic concepts we’ll cover in this publication will apply to most, especially at the beginning stages.
For the sake of organization, we’re going to break it down into categories. Please understand this is not necessarily an exhaustive list of all the options available. We will cover all of these in detail in future posts.
Trade Services:
These will require real experience and generally come with heavier licensing/insurance requirements as well as (relatively) substantial risk.
Plumbing
Electrical
HVAC
Roofing
Painting
Carpentry
Hardscape/Excavation
Window/Door Install
Flooring/Tiling
Fencing
Maintenance/Luxury Services:
These are more simple to get off the ground with a lower barrier to entry. They’re also generally speaking a recurring revenue model (with exceptions)
Exterior Cleaning (roof, window, house, etc)
Interior Cleaning
Pool Cleaning
Landscape
Pest Control
Christmas Lights
Hopefully you get the general idea now. You do NOT have to be a skilled tradesman to run a home services company. There are all kinds of options available to you to choose from.
They all require some skill and knowledge to an extent, but Maintenance & Luxury/Seasonal services are quite a bit simpler and can often times be learned in a matter of months as opposed to years like a Trade business.
IMPORTANT: Yes, there are some maintenance/luxury services that are more technical than they seem.
Deciding Which Service To Choose
With so many options available, how does one decide which is best? The answer is, of course, that none are “best”.
There’s only what’s best for you and the goals you’re looking to accomplish by starting a business.
Here’s what you should consider before getting into a service business.
What skillset do you currently possess?
How much capital do you have to deploy?
What size of company are you looking to build?
The above listed questions are extremely important. You should not be getting into business “casually”. If you’re considering it, there must be some reasons.
Identify them.
Do you:
Want more money?
Want more freedom in your schedule?
Want to build generational wealth?
Whatever your motivation is behind starting a business, identify it and figure out how you’re going to channel that into a defined plan to accomplish your goals.
“Do I need a written business plan?”
Probably not.
But it depends on a few things:
Are you having to borrow money to get this started and/or to purchase an existing business?
Do you already have experience in business management at a previous company?
If those apply to you, you’ll need one and frankly will likely benefit from writing it out. You’re probably that type of person.
If you’re another tradesman just looking to become your own boss, don’t bother. You’ll be wasting your time.
How one approaches starting a business is entirely based on the factors I’ve described above. In my experience, most people looking to start a trade business typically fall into one of the two categories listed below.
Guy A:
Mid 20’s to 30’s
Solid income but no real room to move up at work
A decent chunk of capital ready to deploy
Probably in some sort of management or sales position
Have read all the gurus & Huber
More than likely they’ll be looking to buy a franchise or an existing business because they “don’t have time” to start something from scratch. (They’re going to be in for a rude awakening soon.)
Guy B
Mid 20’s to 30’s
Works a trade job but company sucks
Knows he could do the same exact work and double his salary for himself
Just wants to at least get his own license and be his own boss
This guy has an advantage because he’s worked in the industry, and when you’re starting from scratch you need to know the basics and be able to perform the work. The problem is they’re going to have to start working with their brain instead of their hands. (This is not an insult for what it’s worth.)
Whichever “Guy” you are doesn’t matter. Both have their place.
A prospective entrepreneur needs to identify the motivations behind what he’s looking to accomplish and the skillsets required to get it done. That’s where you need to start.
The work required to become a Solopreneur tradesman is a lot different than the work required to build a $10 million/year service business. They are NOT the same thing, even if they’re in the same industry.
Either way, everybody starts from zero. My goal here is to give you the foundational information and context you need to make the right decisions for the goals you’re looking to accomplish. (To be perfectly clear, if the goal is $10 million/year, I can only get you so far. Remember, this publication is for the basics.)
The next post will provide more context into the Pros & Cons of Trades vs Maintenance/Luxury service offerings.
Until next time,
- HSG
A quick note:
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